Budapest government has extended the price cap on fuel and some staple foods in Hungary until October 1, while the cap on interest rates on mortgages will remain in place until the end of the year, Prime Minister Viktor Orban announced on his Facebook page, Reuters reports.

Since Russia’s invasion of Ukraine, inflation has risen significantly in Central Europe, amplifying already strong price pressures following the pandemic and prompting central banks to raise interest rates sharply.

In Hungary, the inflation rate rose to more than 10% last month, while the forint depreciated to a record high against the euro, forcing the central bank to raise interest rates.

The Hungarian energy group MOL has demanded a gradual withdrawal of the measure. MOL CEO Zsolt Hernadi told local media that the phasing out of the petrol and diesel price cap would be necessary to ensure long-term security of supply, according to Agerpres.

European Commissioner for the Internal Market Thierry Breton has also called on Hungary to suspend the sale of different price fuels for cars with foreign number plates, otherwise risking the initiation of infringement proceedings, according to a European Commission letter consulted by Reuters.

Breton said the EU executive reserves the right to launch infringement proceedings that could eventually lead to legal action against Hungary and possible fines.

The government in Budapest announced in November that gasoline and diesel prices could not exceed 480 forints ($1.25) per liter at gas stations, below current prices of more than 500 forints. Also, in February, the prices of some basic foods were capped.

The measures cut 5-6 percentage points from core inflation, Orban says.